Online Reporter
Nqobile Bhebhe
Zimpapers Business Hub
Tanganda Tea Company says it emerged from the Covid-19 pandemic period with a significant cash flow deficit, which got worse due to a combination of global and domestic headwinds, prompting directors to propose raising US$8 million through a Rights Offering.
The agricultural export group said the lingering effects of the pandemic, coupled with climate shocks, depressed international crop prices and energy challenges, have widened its cash shortfall to about US$6,36 million.
The deficit has been exacerbated by significant headwinds, namely global climatic phenomena such as El Niño, decline in international crop prices and the shortage and high cost of power.
The company said these pressures had strained working capital and heightened the urgency for fresh capital injection to sustain operations and fund growth initiatives.
“If the company does not invest US$6,36m capital into timely and scheduled procurement of agricultural inputs and beverage packaging materials, anticipated business growth may not be realised,” the firm said in a circular to shareholders.
“The crop diversification strategy successfully undertaken in the past 13 years, which is now bearing fruit, has, however, brought with it increased demand for upfront payments from the company’s global value chains.
“The working capital cycle for plantations can extend to as long as 15 months, encompassing flowering and fruit set, harvesting, primary processing, value addition, exporting and collection from customers.
“If adequate cash cover is not provided for these inputs and operations, scheduled production for the coming seasons will be affected. Consequently, the anticipated growth in production volumes may not be realised.”
Tanganda said climate variability was now a structural risk for agricultural businesses globally.
“Changes in climate and weather patterns have resulted in a significant impact on the company’s production and cash flows.
“It has therefore become imperative that agricultural entities all over the world maintain a cash buffer that assists when weather-related headwinds affect the business.
“Tanganda’s total bank borrowings were US$7,1 million as of September 2025, with monthly loan obligations (principal plus finance charges) averaging US$335 000.
“Should weather-related challenges continue to impact production, the probability of failing to settle debt obligations will increase.”
Failure to meet financial obligations could significantly affect the company’s ability to secure further support from the financial sector in the future, it noted.
Directors said the Rights Offer is designed not only to stabilise working capital but also to unlock value across several operational areas.
“Cracking the nuts will enable the Company to capture the kernel market, whose returns are expected to be better and mitigate potential loss of revenue.”
The company is also implementing a turnaround plan focused on cost containment and operational efficiency.
Tanganda gadzirisai nyaya ye mwana wa Mwari Baba wemakadzinga, waikuitirai zvakanaka zvoga zvoga, asina nechaakatadza,so things may be well with you.kkkkkkkk hazvisi zvega izvi, gadzirisai henyu. Its never too late to do good.